Former President Donald Trump said the $175 million bond he posted to appeal his judgment in his New York civil fraud case is financially sound and asked a judge to reject a challenge by New York Attorney General Letitia James.
In a court filing on April 15, his lawyers wrote that Ms. James, a Democrat, had wrongfully objected to his bond posting when she submitted court papers on April 4 arguing that the surety company for the bond wasn’t admitted to practice in New York state.
The bond was posted to appeal an earlier $454 million civil judgment handed down by a New York judge in March.
Ms. James had demanded that Knight Specialty Insurance, which issued President Trump the bond, or President Trump’s lawyers provide the company’s qualification documents, including whether the firm is financially solvent. She also wanted more details about what assets President Trump is using to back the bond payment.
The filing said the firm “also independently maintains more than $539 million in assets and $138 million in equity and has access to more than $2 billion in assets and $1 billion in equity.”
They argued that President Trump’s company entered an agreement with both Knight Specialty Insurance and the Charles Schwab bank that allows Knight to “exercise the right to control the account within two business days by submitting a letter to Schwab of its intent to activate that control,” and they argued that it means “the $175 million bond is fully collateralized by $175 million in cash.”
“The DJT Trust granted KSIC a security interest in a Schwab brokerage account, in which the DJT Trust is obligated to maintain no less than $175 million in cash or cash equivalents at all times,” said an affirmation filed in support of the bond by Gregory Serio, the former superintendent of insurance for New York state, according to the court papers.
“KSIC also has a standing agreement with its parent company, Knight Insurance Company, Ltd. (‘KIC’), by which KIC reinsures 100 percent of KSIC’s risk,” the affirmation said. “The $175 million bond at issue is adequately secured.”
Judge Arthur Engoron, who issued the civil fraud decision, has scheduled a hearing for April 22 to discuss the bond issue. However, President Trump’s lawyers argued in court papers that no hearing is necessary. They said that their “evidence in support of justification is overwhelming and obviates any need for a hearing” in the matter.
Knight Specialty is owned by California-based billionaire Don Hankey, who confirmed to media outlets earlier this month that he was “happy” to provide the bond payment.
“This is what we do at Knight Insurance, and we’re happy to do this for anyone who needs a bond,” Mr. Hankey told The Associated Press earlier this month after the former president made his bond.
He has previously said he’s never met or spoken with the former president.
Mr. Hankey, who donated $80,000 to the Trump campaign and the Republican Party in 2016, has said politics did not influence his decision to offer help. He previously said President Trump offered up both cash and bonds as collateral.
“I’m chairman of the board of several companies, and we just carry on our business and we try to stay away from political issues or taking sides,” Mr. Hankey told The Washington Post.
Mr. Hankey told Reuters that Knight likely did not charge President Trump enough due to Ms. James’ scrutiny of the bond as well as the media attention around the payment.
“We thought it would be an easy procedure that wouldn’t involve other legal problems and it’s not turning out that way,” he said. “We probably didn’t charge enough.
“We have been getting a lot of emails, a lot of phone calls. Maybe that’s part of the reason he had trouble with other insurance companies,” he added, saying he doesn’t regret providing the service.
Responding to Ms. James’ questions about whether his firm has the money, Mr. Hankey, who Forbes estimated to be worth about $7 billion, said, “I’m surprised they’re coming down harder on our bond or looking for reasons to cause issues with our instrument.”
The filing came just hours after the former president spent his first day in court for the so-called “hush-money” trial in Manhattan, where he is accused of falsifying business records during the 2016 presidential campaign.
He’s pled not guilty to the charges, saying the case—along with the separate civil fraud judgment—are politically motivated.
